M/S T.K. Printers vs. Additional Commissioner Grade 2 And Another
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The petitioner, M/s T.K. Printers, an authorized vendor of Bharat Petroleum Corporation Ltd. (BPCL), was transporting 4 MPD machines from Kanpur to Banda for installation at a BPCL petrol pump. The vehicle carrying the goods was intercepted on January 28, 2021. At the time of interception, an e-way bill could not be generated due to a technical glitch at BPCL's office. The driver's statement was recorded, and upon physical verification, no discrepancy was found in the consignment. However, the goods were detained on January 29, 2021, with the authorities deeming the submitted documents as an afterthought. A notice was issued, and despite the petitioner submitting a reply with an e-way bill, it was rejected, leading to an order dated February 4, 2021, imposing tax and penalty. An appeal against this order was dismissed. The petitioner assails the orders dated July 10, 2023, and January 29, 2021, passed under Section 129(3) of the UP GST/CGST Act, 2017.
Held
The Court held that the impugned orders dated July 10, 2023, and January 29, 2021, passed under Section 129(3) of the UP GST/CGST Act, 2017, could not be sustained in the eyes of law and were liable to be quashed. The Court noted that at the time of detention, the goods were 4 MPD machines intended for installation at a BPCL petrol pump, and a certificate confirmed they were not for trade, meaning their price could not be determined in the open market. Furthermore, the authorities did not dispute that the goods were on stock transfer from BPCL Kanpur for installation at BPCL Banda. The goods were seized on the ground that the e-way bill and delivery challan were not accompanying them, but the e-way bill was generated and produced before the detention order was passed. Crucially, none of the authorities recorded any finding with regard to evasion of tax. The Court found that the issue was squarely covered by its previous judgments in M/s Vacment India Limited and M/s Goverdhan Oil Mill. Consequently, the writ petition was allowed, and any amount deposited by the petitioner was to be refunded.
Key Issues
1. Whether the proceedings initiated against the petitioner under Section 129(3) of the UP GST/CGST Act, 2017, are vitiated by a violation of the circular dated May 9, 2018, issued by the State Government, and whether the goods, being for installation and not for open market sale, indicate no intention to evade tax? 2. Whether the detention and subsequent orders are invalid because the e-way bill was generated prior to the detention order and produced along with the reply, and the goods were on stock transfer, not for trade, as supported by a certificate and the lack of dispute from authorities regarding stock transfer and no intention to evade tax? Petitioner's arguments: The proceedings violate the circular dated May 9, 2018. The goods, meant for installation at a BPCL pump, cannot be sold in the open market, negating any intent to evade tax. The e-way bill was generated before the detention order was passed and was submitted with the reply. The goods were on stock transfer, and authorities did not dispute this or the absence of tax evasion intent. Reliance was placed on this Court's judgments in M/s Vacmet India Ltd. Vs. Additional Commissioner Grade -2 and another and M/s Goverdhan Oil Mill Vs. Additional Commissioner and another. Respondent's arguments: The learned ACSC supported the impugned orders.
Sections Cited
Section 129(3)
AI-generated summary — verify with the full judgment below
Neutral Citation No. - 2025:AHC:85947 Court No. - 10 Case :- WRIT TAX No. - 1486 of 2023 Petitioner :- M/S T.K. Printers Respondent :- Additional Commissioner Grade 2 And Another Counsel for Petitioner :- Aditya Pandey Counsel for Respondent :- C.S.C Hon'ble Piyush Agrawal,J.
Heard Mr. Aditya Pandey, learned counsel for the petitioner and Mr.Ravi Shanker Pandey, learned ACSC for the respondent.
By means of present petition, the petitioner is assailing the orders dated 10.7.2023 and 29.1.2021 passed in the proceedings under Section 129 (3) of UP GST /CGST Act, 2017. 3. Learned counsel for the petitioner submits that the petitioner is an authorized vendor of Bharat Petroleum Corporation Ltd. (BPCL) having GSTIN No. 09AWSPS5747A1Z0. He submits that in the normal course of business, the petitioner was directed by the BPCL to transport 4 MPD machines (Petrol and Diesel delivery machines), which were going to be installed at the petrol pump of BPCL at Atarra, Distt. Banda and in pursuance thereof, the goods in question were loaded on the Vehicle No. UP78DT 5969, however due to some technical glitch at the office of BPCL, e-way bill could not be generated at that time. The vehicle in question was on its onward journey from Kanpur to Banda, was intercepted on 28.1.2021 and statement of the driver was recorded in Form GST MOV-1. Thereafter, on physical verification, no discrepancy was found in relation to the consignment, but the goods were detained on 29.1.2021 on the ground that the documents produced by the petitioner were an after thought. Thereafter notice was issued in Form GST MOV -07 to which the petitioner has submitted reply along with the e-way bill but the same has been rejected and order dated 4.2.2021 has been passed in Form GST MOV-09 by which tax as well as penalty has been imposed. Being aggrieved to the said order, the petitioner has filed an appeal, which has also been dismissed without considering the material on record.
Learned counsel for the petitioner further submits that entire proceeding initiated against the petitioner is in violation of circular
dated 9.5.2018 issued by the State Government. He submits that the goods in question cannot be sold in open market as per the direction of Ministry of Petroleum and Natural Gas. He submits the goods in question were going to be installed at the Petrol Pump of BPCL at Atarra, Banda. He submits that the E-way bill was generated at 12:44 PM while the detention order was passed at about 6:56 PM on 29.1.2021, therefore, it is clear that the e-way bill was generated prior to passing of the detention order and same was produced before passing the order of detention. He further submits that before passing of the detention order along with the reply to the notice, stock transfer note as well as e-way bill was submitted but the same was not acknowledged by the respondent authority. He submits that once it is admitted that the goods in question cannot be sold in open market, then there is no intention to evade the payment of tax, therefore, the entire proceedings is bad and is liable to be set aside.
He further submits that the goods in question was on stock transfer from Kanpur to Banda, therefore, proceeding initiated against the petitioner is bad. In support of his submission, he relied upon the judgement of this Court in the case of M/s Vacmet India Ltd. Vs. Additional Commissioner Grade -2 and another (Neutral Citation No. -2023:AHC:200160) and M/s Goverdhan Citation No. 2024:AHC:63409). He further submits that none of the authorities below have disputed the fact that the goods were not as stock transfer and there is no question of evade of payment of tax. He prays for allowing the present petition.
Per contra, learned ACSC supports the impugned order.
After hearing learned counsel for the parties, the Court has perused the records.
Admittedly, at the time of detention, the goods in question was 4 MPD machines (Petrol and Diesel delivery machines) and same were to be used for installation at the petrol pump of BPCL at Atarra, district Banda. A certificate has been brought on record showing that the said goods were not for trade, therefore, price of the same cannot be determined.
Further none of the authorities have disputed the fact that goods in question were stock transfer, in other words, the goods were coming from BPCL Kanpur for installation at the petrol pump of BPCL at Atarra, Distt. Banda.
The goods in question were seized on the ground that e-way bill and delivery challan were not accompanying the goods at the time of interception but the same was generated and produced before passing the order of detention.
Further none of the authorities below have recorded any finding with regard to evasion of tax.
The issue in hand is squarely covered by the judgement of this Court in the case of M/s Vacment India Limited (supra) and M/s Goverdhan Oil Mill (supra).
In view of the facts and circumstances of the case as well as law laid down as referred herein above, the impugned orders dated 10.7.2023 and 29.1.2021 cannot be sustained in the eyes of law and same are hereby quashed.
Accordingly, the writ petition is allowed.
Any amount deposited by the petitioner shall be refunded to him in accordance with law. Order Date :- 21.5.2025 Rahul Dwivedi/- RAHUL DWIVEDI High Court of Judicature at Allahabad
Reproduced from the public record of the Allahabad High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.